EUR/JPY Weekly Outlook

After dipping to 160.58, EUR/JPY recovers strongly and is now pressing 4 hours 55 EMA. (now at 162.45). With 4 hours MACD crossed abvoe signal line, an mild bullish convergence condition in 4 hours RSI, fall from 164.97 could have completed at 160.58 already. Initial bias is neutral this week. Berak of 162.98 resistance will confirm this case and bring stronger rise to 164.97. However, below 160.58 again will indicate that fall from 164.97 has resumed for 158.24 cluster support.

Also, note that, rise from 151.71 could still be in force with 158.24 support (50% retracement of 151.71 to 164.97 at 158.34) remains intact. Break of 164.97 will indicate such rally has resuemd for upper end of the medium term range near to 168.93 high. However, break of 158.24 support will confirm this rally from 151.71 has completed bring deeper decline towards the lower end of the medium term range near to 151.71.

In the bigger picture, EUR/JPY turned into sideway consolidation after medium term up trend was limited at 168.93. It's unclear whether such consolidation has completed at 151.71 already and hence firm break of 168.93 high is needed to confirm resumption of the long term up trend. Meanwhile, on the downside, below 158.24 will suggest that such consolidation is going to extend further before completion.

In the longer term picture, EUR/JPY is still staying inside long term rising channel (support at 155.64). The long term up trend from 88.97 (00 low) is probably still in force. Nevertheless, more choppy trading could be seen with EUR/JPY still staying inside range of 149.27 and 168.93 before firm break above this 168.93 high. Though, on resumption, the long term up trend is expected to target next important cluster resistance at 188.22 (50% retracement of 285.56 (79 high) to 88.97 (00 low) at 187.26). Meanwhile, firm break of 149.27 low will argue that the whole up trend form 88.97 (00 low) has completed. In such case, much deeper medium term decline would be seen to support zone of 124.15 and 140.92 first.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box